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Agenda Item No. 5

The Vale of Glamorgan Council

 

Scrutiny Committee (Social Care and Health): 7th November 2013

 

Report of the Director of Social Services

 

The Financial Position in Adult Services

 

Purpose of the Report

1.             To bring to the attention of the Scrutiny Committee, the current position in Adult Services regarding revenue expenditure.

2.             To provide the Scrutiny Committee with an analysis of pressures on the budget for Adult Services.

3.             To give the Scrutiny Committee an update on the actions being taken to mitigate anticipated overspends, in part through delivery of the Social Services Budget Programme.

Recommendations

It is recommended:

 

1.             That the current position with regard to the 2013/14 revenue budget is noted.

2.             That the progress made in managing increased demand and delivering measures to control expenditure is considered.

3.             That this report is referred to Cabinet for information.

Reasons for the Recommendations

1.             That Members are aware of the current position with regard to the 2013/14 revenue budget and the actions being taken to bring expenditure within the budget set for the Adult Services Division.  

2&3.         That Members are able to exercise effective oversight of the way in which the

         budget is being managed. 

Background

4.             Resource management in adult social care is inherently problematic.

·         Potential demand for most social care services will often exceed supply and so we are always involved in establishing eligibility.

·         Like all local authorities in Wales, this Council is heavily dependent on funding from the Welsh Government.  The formula used to allocate this funding is especially problematic for the Vale of Glamorgan.  It means that social services here receive substantially less money for spending on social services than local authorities similar in size.  The outcome is that our average spend per head of population is relatively low. Comparison from 2011/12 revenue expenditure data indicates that the Vale spent £784 per head on people over 65 compared with £914 as an average across Wales.  A review of the Standard Spending Assessment for 2012/13 indicates that the budget per head for Adults in the Vale is £524, compared with a Welsh average of £646, and that the Vale provides the lowest spend per head in Wales (ranked 22 out of 22 local authorities).  Therefore, we have to be exceptionally efficient; like any other "lean" organisation, there is limited scope for ineffective use of resources.

·         Decisions which affect the type and cost of services to be provided are often outside the Council's control and may be unpredictable.

·         Some individual services are very expensive.  Even with the appropriate monitoring and efficiency measures and controls operating well, packages of care for adults with especially complex needs can exceed £100,000 a year.

·         Financial decisions have to follow the changing needs of individual users.

·         Market pressures sometimes mean that councils can face escalating costs when purchasing services from independent providers.  For example, the cost of independent sector residential care home fees for older people increased by 13% in 2011/12.  Further details are provided throughout Appendix 1.

·         While some services are low volume and high cost, others such as the provision of home care and some residential care services are notable for their high turnover and volatility, brought about by changes in circumstances such as admission to hospital.

·         Expenditure incurred in one year may lock the Council into financial commitments on behalf of individual service users for many years to come.  For example, a package of care commissioned for someone who has just turned eighteen may still be required in to old age.

·         To balance the competing priorities of managing service demand, improving quality, meeting higher expectations and reducing expenditure is especially difficult in situations where safeguarding people from significant harm has to be a key factor in decision-making.  Packages of care are provided only to those who have substantial or critical needs.  This eligibility decision is made through an assessment of risk and packages are put in place to mitigate these identified risks.

 

5.             Given this challenging context, it is essential that the Council has in place a coherent strategy for securing financial stability within the resources available.  On 30th July 2012, Cabinet endorsed the Social Services Budget Programme.  Since that time, the Social Care and Health Scrutiny Committee has received monthly progress updates on the way in which the programme has been implemented.

6.             In respect of the overall budget programme, the Social Services Directorate is currently required to find savings totalling £6.0m by the end of 2016/17.  Savings totalling £6.189m have been identified.  The surplus will be used to mitigate any additional savings to be found in future years.

7.             The following table shows the approved savings targets and the savings identified by year.  It includes the £403,000 identified in 2012/13 in excess of the saving target for that year.

Year

Savings Required

£000

Savings Identified

£000

In Year Surplus/ (Shortfall)

£000

Cumulative Surplus/   (Shortfall)

£000

Additional 2012/13 savings

 

403

403

403

2013/14

2,150

2,040

(110)

293

2014/15

838

579

(259)

34

2015/16

1,700

1,776

76

110

2016/17

1,315

1,391

76

186

TOTAL

6,003

6,189

 

 

 

8.             The current forecast for Social Services is an overspend at year end 2013/14 of £876k.  This is after deducting savings of £2,04m identified for the year. 

9.             In Adult Services, the major issue is the continuing pressure on Community Care Packages.  This is the Division's most volatile budget and the one most dependent upon levels of service demand which are not within the Council's direct control.  At present, the projected year end position for this budget is an overspend of £1.635m, after the reduction in budget to accommodate the savings target for the year of £685k.  There are potential underspends elsewhere in Adults Services of around £466k which could be used to offset this position.  The overall projected overspend for the Division at year end is £1,169k.

10.         A decision on the allocation of additional funding identified by Welsh Government for the First Steps initiative (which resulted in the introduction of the £50 cap for non residential services) has not yet been received.  Any grant received will reduce the overall overspend. Should this be allocated to councils on the basis of the same formula as previously, the Vale of Glamorgan Council would receive £118k.  The Leader of the Council has made representations to Welsh Government Ministers on this matter on a number of occasions from officers and the leader of the council.  A copy of the report sent to Welsh Government detailing the full impact of the measure for the Vale of Glamorgan is at Appendix 2.

11.        On 10th September 2013, concerned by the latest revenue monitoring report, the Corporate Resources Scrutiny Committee requested a report on the current financial position in the Adult Services Division and the steps which are being taken to mitigate further expenditure. 

Relevant Issues and Options

12.        Attached at Appendix 1 is a report in which officers have analysed the financial position, demand for services and spending patterns.  This report demonstrates the extent to which the projected overspend is the outcome of unprecedented increases in demand for domiciliary care services by older people. 

13.        Directors of Social Services across Wales report a similar picture.  Inflationary pressures, demographic changes, uplifts in the fees paid to independent providers, increasingly complex and costly packages of care, pressures on the NHS, full year commitments of cases and overspends brought forward from 2012/13 have all contributed to a deteriorating budget position.  Budgets have struggled to keep pace with demographic pressures and the increasing numbers of people presenting themselves for assessment.  The impact of our success in supporting people with increasingly complex needs at home has been a significant increase in spend by local authorities.  Advances in medical care are keeping an older population alive for longer; however, they are likely to experience poor health in this extended time.  In addition, many younger adults are surviving childhood illnesses and disabilities that would in the past have been life-limiting.  These positive developments have resulted in a rise in complex cases requiring higher levels of care.  It is anticipated that the forthcoming Welsh Government Settlement for 2014/15 will require wholesale reconfiguration of services as well as the cessation of some services.

14.        With the exception of the increase in care package commitments, the Adult Services Division has made good progress in delivering the actions agreed in the Budget programme, as demonstrated by the routine monitoring reports.  The report in Appendix 1 also highlights the considerable activity undertaken to date in response to rising demand.  This programme is being accelerated and Cabinet will be provided with a report as soon as possible outlining additional steps that will be necessary to bring expenditure in line with the allocated budget.  This programme of change will be underpinned by use of the small amounts of grant funding made available by Welsh Government for regional collaboration and preparing for implementation of the Social Services and Well-being (Wales) Bill.

Resource Implications (Financial and Employment)

15.        The Social Services Directorate is committed to achieving a balanced budget.  The only realistic way forward is a planned transition to new service models.  Achieving changes in future service provision at a time of severe financial constraint may have an impact upon staffing levels and due consideration will be given to the Council's employment policies and procedures.

Sustainability and Climate Change Implications

16.        Changes in the pattern of services are planned on the basis that resources need to be used more efficiently, avoiding waste and duplication across public services.

Legal Implications (to Include Human Rights Implications)

17.        There are no legal implications as a direct consequence of this report.

Crime and Disorder Implications

18.        There are no crime and disorder implications.

Equal Opportunities Implications (to include Welsh Language issues)

19.        Equalities issues have been taken into consideration when producing the Budget Programme and the Directorate Service Plan.

Corporate/Service Objectives

20.        Effective monitoring assists in the provision of accurate and timely information to Members and officers and in particular allows services to better manage their resources.

Policy Framework and Budget

21.        The report is in accordance with the Policy Framework and Budget.

Consultation (including Ward Member Consultation)

22.        This report does not require Ward Member consultation.

Background Papers

None

Contact Officer

Lance Carver (Head of Adult Services/ Locality Manager)

Officers Consulted

Carolyn Michael (Senior Group Accountant)

Responsible Officer

Phil Evans, Director of Social Services

 

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